Pretend You're Retired for a Month

Lessons to learn from this experiment.

Retirement is ideally a happy time of your life, freeing you up to do things you’ve long postponed. However, the prospect of retirement can also cause stress if you’re not sure you have enough money to retire in the lifestyle you’d like. We suggest a dry run: Try living for a month on your projected retirement income. The results might be eye-opening.

Now’s the time to calculate your monthly retirement income. You’ve built your wealth over your career, and it will soon be time to reap your rewards. Social Security is just a drop in the bucket. You have your retirement accounts, your investment portfolio, your real estate holdings, and any annuities and other income arrangements you’ve made.

You deserve a full, rich lifestyle when you retire. Living a month as a “retiree” will quickly bring home how your financial resources match your dreams. Perhaps you want to travel, or buy a yacht, or move to an elegant retirement community. Or maybe you’d like a pied-a-terre in a large city where you can enjoy fine restaurants and cultural amenities. It’s your choice, but that choice might be constrained by your income.

Retirement is a time of choosing. You might find that your monthly retirement income will require some hard choices. Seniors often want to simplify their lives, but many may be forced to make sacrifices they haven’t contemplated. On the other hand, many might be intimidated by inflation and the prospect of a long life, wondering whether the money will last.

Planning early can give you an idea of your future retirement income and help prepare you for inflation. Ideally, you’d like to begin planning your retirement at least a decade in advance. Living a month on your projected retirement income will reveal any gap between what you want and what you can afford. The sooner you start planning, the narrower the gap. You might be retired for a long time. Planning helps address the worries of outliving your money, or having to hem in your lifestyle.

This material was prepared by Deluxe. LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.

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